Form 4: Altus Power Co-CEO Gregg J. Felton Reports Stock Transactions

Gregg J. Felton, Co-CEO, Co-Founder, and Co-President of Altus Power, Inc., reports acquisition and disposal of Class A Common Stock and grants of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs).

Summary

• On March 22, 2024, Gregg J. Felton disposed of 56,849 shares of Class A Common Stock to cover withholding tax liabilities at a price of $4.79 per share.
• On March 28, 2024, Felton acquired 198,248 Restricted Stock Units (RSUs) and 263,598 RSUs, both under the Altus Power, Inc. 2021 Omnibus Incentive Plan.
• The first set of RSUs vests in two equal installments on the first and second anniversaries of the grant date.
• The second set of RSUs vests in three installments, approximately 33.3% on the first and second anniversaries, and approximately 33.4% on the third anniversary of the grant date.
• Also on March 28, 2024, Felton acquired 175,732 Performance Stock Units (PSUs) which vest on the third anniversary of the grant date based on the company's total stockholder return compared to the Invesco Solar ETF (TAN) and the Russell 2000 index.
• The number of PSUs that vest can range from 0 to 150% of the reported amount.
• Felton directly owns 4,094,857 shares of Class A Common Stock after these transactions.
• Additionally, 11,882,103 shares are held by Felton Asset Management LLC, of which Felton is the managing member, but he disclaims beneficial ownership except to the extent of his pecuniary interest.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices and insider transactions. The grants of RSUs and PSUs are generally positive as they align management's interests with shareholders. The disposal of shares to cover tax liabilities is a neutral event.

Positives

• The grant of RSUs and PSUs to the Co-CEO aligns his interests with the long-term performance of the company.
• The performance-based vesting of the PSUs incentivizes outperformance relative to industry benchmarks (TAN ETF) and the broader market (Russell 2000).

Risks

• The value of the PSUs is contingent on Altus Power's stock performance relative to the Invesco Solar ETF (TAN) and the Russell 2000 index, which may be affected by factors outside of the company's control.
• The vesting of RSUs is dependent on continued service to the Issuer.

Future Outlook

The document outlines future vesting schedules for RSUs and PSUs, indicating potential future issuance of Class A Common Stock.

Industry Context

This filing is typical for executives receiving equity compensation in publicly traded companies. The use of performance-based units (PSUs) is a common practice to align executive compensation with shareholder returns, particularly in growth-oriented sectors like renewable energy.

Comparison to Industry Standards

• Equity compensation practices vary across the renewable energy industry, but the use of RSUs and PSUs is common.
• Companies like SolarEdge and Enphase Energy also utilize similar equity-based compensation plans for their executives.
• The vesting schedules and performance metrics (e.g., relative TSR) are generally aligned with industry best practices to incentivize long-term value creation.

Stakeholder Impact

• Shareholders may view the equity grants as a positive sign of aligning management's interests with long-term company performance.
• The potential dilution from future vesting of RSUs and PSUs is a consideration for shareholders.

Key Dates